tv U.S. House of Representatives CSPAN July 26, 2012 5:00pm-8:00pm EDT
independent of that process, i want to make it clear that the fhfa and the fha are looking for ways at a defining those roles that they can help define those concerns get for an average individual with great -- a credit scores. those rules have to be designed very carefully. what the chairman is doing but the other agency as is possible for the qualified will, they are trying to figure out how to balance the needs for more careful underwriting standards better disclosure with the need to be careful not to overdo it. >> in that context, we need to be sure we do not define the qm's too narrowly? >> i agree with the objective completely. you want to make sure both of
these rules are designed together and carefully to reduce the risk. >> thank you. i want to move to another topic since time is short. i want to go to the end user issue. you may recall that ever since the dodd frank conference, there has been debate about whether non-financial end users for intended to be exempted from the margin requirements. that is what members of congress intended. chairman dodd acknowledged that the language was intended to exempt those entities that use them to hedge or mitigate commercial risk. regulators have read the statute otherwise and have issued regulations that do in fact require margin from non- financial and users. they take the position that it
was the exact language still bound by. because of that, i introduced legislation to correct that and make it clear there is an exemption for non -- for the end users. when he was before the banking committee recently, i asked this question to chairman bernanke -- would it be appropriate for us to correct that language and provide an exemption for non- financial and users so that it is clear that is what statutory language requires? >> i do not think you need to do that. the way the statute was designed, you gave flexibility and discretion to the regulators to try to achieve the objective you laid out. i think the concern is if you opened this up too much, you will let the exception undermined critical safeguards over financial institutions that the law was intended to cover. i cannot think this requires a legislative fix. the law gives regulators discretion to get that balance
right. it is not something we need to continue to look at. i would be happy to consult with you and talk to closely about it to get a better feel for how they are defining that balance. >> do you believe the statutory language as is currently gives regulators the authority to exempt non-financial and users? >> it is regulators -- it gives regulators the ability and authority to define the exception that i think meets your objective. but you are not saying there should be no exception for end users? we need to get it right. >> that is right. the law as you wrote it does try to make sure you're not capturing people in risks you do not need to capture. but it be great acceptance in the polls, you will end up swallowing the bader safeguards necessary. i know that is not your intent
but that has to be our concern. >> you are worried that if congress does this, they may get it wrong and be too broad in the exception? what i think the balance the congress struck was right and regulators were given the ability to get that balance right. what would you agree that if the law is interpreted to mean otherwise -- i understand the regulators are taking the position that they do not have that discretion. would you agree the regulators need to have the discretion to address this issue and provide an appropriate form exemption? >> i want to talk to them more carefully and come back to you and follow up on it. in general, we are trying to be very careful to make sure that we do not legislate things that would weaken the overall protections in the bill. we think the law give the
regulators the ability to strike an appropriate balance in this context. >> you are not saying they should be no exception appropriately defined for and users? >> i am saying they should implement the law as he intended it. >> thank you. >> thank you, mr. chairman. one of the emerging threats in the report you identified and the uncertainty posed by the impending fiscal cliff over the past year, the cost of dysfunction in washington has caused volatility in the financial markets, frustration on wall street and uncertainty with the economic recovery. the gao released a report saying -- say the treasury department was forced to spend $1 billion in additional costs. that was a self-inflicted wound. that was people putting political agendas ahead of the
country. i do not like the situation we have found ourselves in. we do need a long-term plan to get our fiscal house in order. but also did not like having to tell folks that because those in washington cannot get it together, it cost us over $1 billion. some were willing to see the federal government default on its debt. that was the result of the credit union downgraded by standard and poor's. this is a real cost associated with our lack of action on this issue. art that -- our debt increases by billions of every day in washington. just this week, we had the made in washington fight over competing tax plans. instead of working to adjust the debt, we are no closer to resolving our problems. we can spend the next few weeks pointing figures but if we continue to play political games, nothing will ever get
done. we have to get more urgent about this issue. we need a bipartisan, balanced deficit reduction plan that has -- that is broad in scope. it will have to cut spending, and include revenue. there is only one bipartisan plan that had achieved this scale scope necessary to begin to tackle the challenges before us, developed by the president's commission. the in ministration did not initially support. -- the administration did not initially support it. i do not support everything in the commission's plan but it is a starting point and a real plan. they are now in their third iteration with input from a number of members from this committee. i am encouraged that the president -- i am concerned that the president has given only
lukewarm support to these efforts so far. that came after the gang of six introduced a plan last july. given the experiences of the past few years, do you regret that the administration did not engage earlier on this issue? >> i completely agree with you that this long -- this problem of the long-term deficit is a serious economic problem. it is not something we can avoid. the solution to this will lie in the broad frame of what some symbols without. it will-- in what simpson bowles laid out. that is where this began, that is where it will end. even if you and others have some disagreements over the composition of the design, we
have been very supportive of that basic strategy. the president of the united states attend the april 2011 and september, laid out a detailed set of recommendations both on the tax reform side and the spending side that would meet the basic test of restoring our deficits to a sustainable level. it is important to keep reminding people that we face these critical challenges. we have an economy that is not growing fast enough. we need to make sure we are doing everything we can to make growth faster so we are dealing the remaining damage. we also have to get congress to come together on a bipartisan basis and agree on a set of reforms that we store sustainability. we have to do this carefully so we do not hurt growth. it will make us more competitive or a long run.
we need to get the country to come together. we can make some tough choices in this area. you've expressed concern about the action the senate suggested a but i want to speak in favor of what happened. but the senate did was extend tax rates for 98% of americans but also demonstrate they are prepared to do the fiscally responsible thing by allowing those tax rates of the top to% to expire. that was a good example of what you can do that is good for the economy but also demonstrating that this town can make some tough choices and restore stability. >> my concern was more with the fact that if it comes to fruition. my time has run out. i think the country is ready for a long-term plan to take care of our deficit and debt on the long term. the country is far ahead of
washington on that. the question that i have, and congress has its own faults, the question i have is what have you learned? what are you going to recommend to the president when the time is right to push forward? a real plan to get our deficit under control. >> i have been a long and consistent supporter of action on the ballot from mark a tax reforms to raise revenue tied to long-term reforms across government on the spending side that are designed to protect the safety net and make it more sustainable over time and preserve the ability to invest in things that matter for growth. that is given by a basic recognition that if we will do more for growth in the economy stronger, we have to deal with these long term fiscal needs. we cannot sit -- if we do that
alone and do not address the broad range of challenges that middle-class americans face, the erosion will leave the country worse off. >> thank you very much. >> thank you, mr. chairman ed thank you, mr. secretary. i want to talk about the things fsoc has the ability to look at. there were lots of words like liquidate your out the bill. the fdic has come forth with their proposal and what is happening is in these highly complex institutions, they found out they were so intertwined that the best way to deal with them was to let the entity continue to operate but take the stockholders out and some of the creditors at a holding company level but continue to allow the institution to operate. which is very different than
liquidation. for people concerned about consolidation, on one hand that solve the problem but it does not deal with -- as it over and over what to put these banks out of business. the fdic really does not do that. it is a process where they operate these entities for up to five years. then they re-ipo them. i know the stockholders are crushed and leadership is gone. those are all good things that the institution fail. but i am wondering -- i think i have discussed how that will be in respect a lot of time with them. do you feel comfortable about that or will be better off if their is systemic risk for the fdic to step in during the immediate phase but then move it
on? that is what happens in a bankruptcy. the entity continues to operate. but you move away from any kind of potential crony capitalism where certain critical -- creditors are dealt with differently. >> i understand your concerns but i do not share them. i think what the fdic design is exactly what you said the objective should be which is to come in, if necessary, and dismember the institution. put it out of its misery, sell whatever a viable remaining -- >> that is not what they have done. >> i believe that is what they are doing. >> they are just doing it at the holding company level. >> that is a slight misimpression. but i understand your concerns about this. they are trying to make sure they have a practical way to do the practical the equivalent of bankruptcy for a large complex
financial institution. but congress did -- what congress did is to -- to deprive them and the fed of the ability to protect them from their mistakes and to leave them to survive to fight another day. i know that ranking member shelby's concern about this, you have the same basic concern. i do not think -- what the bill does is force the largest institutions to hold more capital against risk than would a normal commercial bank, is small regional bank or community bank. and it means that if they end up making mistakes that put them in jeopardy, the government can do nothing but step in and dismember them safely at no risk to the task here. -- to the taxpayer.
>> i did not want to spend all my minutes on this but i do not think the word is member is appropriate. we do not necessarily have to talk to you. >> that is not really a technical term. >> dismember means -- and i think what the fdic found in these organizations are so intertwined. because of that, they are not dismembering them. they are going to allow them to operate up to five years and then re-ipo them. i see some of the benefits of not treating concentration. in other large institutions might have to take those pieces. but i do not think that is exactly what congress intended. i think that if it's going to be laid out the way it is, do might think about a real bankruptcy taking place. in essence, the institution continues to operate under bankruptcy. that move on to one other point.
the money market funds. i think we all believe they create systemic risk as they are currently set up. is that true or false? >> i believe that although they are in a stronger position and smaller in size. i still believe as of the fed that they are still vulnerable. they could hurt the system as a whole. >> so the sec -- and contrary to some of my folks, i do not understand why we are protecting them exactly the way that we are. the sec maybe has not come up with the right solution but i am wondering if you happen to know what the right solution might be. it seems we have not quite come to the right conclusion on the money markets and if the sec
does not take action, i think the fsoc can. i am wondering what your thoughts might be. >> i think it is important that propose a range of options for how to go forward on this so that the market can assess those and comment on them. and the sec and others can reflect on what that means. i think they have to go further than they have gone. there are a range of options. one option is to go to full disclosing. one option -- >> that would take a tax change to make that work? >> a range of things. or have a mix of investment egyptians. liquidity requirements and capital requirements. another option is to have a mix of those things in some kind of hold back provision. it is a complicated question. my judgment is the sec needs to go further and we should go on
to the business of letting them exposed to the world -- expose options to the world. >> i think this should not create tax consequences. if i could ask one more question, in light of community banks lobbying about the transaction account guarantee, i think it expires at year end. i am reticent to want to continue things like that. if you look at a transaction account, it does not take much activity to have a transactional account. if you get excess reserves with money market payne almost nothing, you can move into a transaction account that is fully guaranteed. i think there's that -- there has been tremendous flight into transaction accounts for this reason. it is fully insured. i would love to have your thoughts as we consider this.
should we continue to expand full guarantees on transaction accounts? or should be and government involvement in that way? -- should we end government involvement in that way? >> very good question. it is not our judgment to extend it. that has been the judgment so far. i know this is an issue and concern to many people. we will have to look at those concerns carefully. >> thank you, mr. chairman. thank you, mr. secretary. in a section of your report, it addresses housing and finance reforms. you know that have differing state standards on foreclosure practices, the lack of agreed standards for mortgage
underwriting, all of these are relevant for restoring market for private capital and financing. i want to focus on a different piece of that puzzle. we have about 4 million familier s underwater who do not have fannie and freddie loans and they are essentially locked into high-interest loans with no chance of refinancing. i am considering the systemic risk from my perspective. they become high risks for foreclosures. the high amount day -- the high amount of money they pay every month means they are not -- they do not have extra spending money that would strengthen other parts of the economy. all those things are interconnected. that is a piece i have -- been immersed in. do you share concern about thos 4,000,005e -- those 4
million families? >> we share your viwew completely. the president has been very supportive. we like the way you design it. it would be -- it is good economic policy, good for the country for that to become law. it would help reduce the remaining pressures the house and is putting on the economy as a whole. a good economic case for doing it. you could do it in ways that does not leave the taxpayer exposed to meaningful risk. >> i would encourage you to help identify any way you can with launching -- i realize there are questions that have to be solved legally but we have a number of these funds out there congressional approved that have been underutilized. it seems like launching a few
pilots would help pave the path for us to build some momentum. >> we would like to work with you on it. the question is whether we can find legal authority and resources to test on a pilot basis. >> i want to turn to another issue. there is an article in "the financial times" about banks stepping up their oil trader role. what it says is that several of the largest banks have got into close relationships with refineries to have a contract to provide the crude. this is essentially because under the draft rules, spot commodities are exempted from
proprietary trading restrictions and banks are also pressing for forward commodity contracts to be exempted as well. my question is, three years from now, will we have a situation where because one entity is affecting the supply of oil and trading over the contracts related by the price of oil, a conflict of interest that will be an and one -- an enron style issue? >> if it is important we have in place safeguards that limit the risk. banks take risks to threaten -- that threatened the stability of the markets were generally. provision but the will or will or part of not important
objective -- provisions like a ofble the volcker rule are a pt that. one of the things that is very important is the fact that the sec has adopted the definition they adopted earlier this month on swaps. that will unlock the range of authorities they have to police abuse and manipulation. we are going to be focus on making sure we are not limiting the risks in those areas but that the market is not vulnerable to manipulation of use. >> thank you. >> thank you, secretary. somethingant to ask about this concerning libor
issue. as we sit here today, do we know whether citibank, bank of america, jp morgan, which participate in the libor process like barclays, did or did not similarly manipulate libor? >> we do not know that but i think that is the question you need to refer to the enforcement agency. because this is still a confidential investigation, they will not be in a position to answer that question until this remaining investigation is brought to its natural conclusion. >> we do not know that as we sit here today. >> i can only tell you what i know and i do not know that. i do not know what they know. the reason i do not is because as you would expect, they have very careful protections around in their investigations to preserve confidentiality.
>> when it did you first nor we did know about this libor issue? >> in the spring of 2008. >> we are now over four years later and we have not answer that question. >> i do not think that is quite right. what we did at an early stage is bring the intention to the highest levels of the relevant agencies to prevent manipulation abuse. >> which brought us to the highest levels but we have not gotten to the bottom of it for and a half years later. does that not suggest somebody dropped the ball? >> the ctt -- cftc at that same time started the investigation. they bought the justice department in. it is to it took four years for them to find the evidence
disclosed in the settlement. i do not know what that is surprising if you look at what is typical in financial cases. if you look at across history of these things, they take a lot of time. >> we do not know if the bank of america urgent -- or a j.p. morgan were involved? >> you have to adjust that to them. to their credit, they started very early and try to make sure that they were examining carefully what there was. not just risk of behavior. they deserve enormous credit. >> as a potential regulators to the new york fed of these three institutions, did you and the new york fattah list -- look into the issue directly? >> i believe we did the necessary and appropriate things.
we bought this to the attention of the british. >> you do not think this issue with regard to those three institutions potentially impacted their safety and soundness? >> i thought this was a very important issue, not just for our financial system but the global financial system which is why we did what we did. what do you think it went to the safety and soundness? >> i do not know. i thought the concerns themselves were sufficiently troubling to justify a substantial response >> given what we all agree is very troubling information about libor, why was it allowed to be the repayment metric for farp? >> what you are referring to i
believe is that in a series of specific programs, the fed and that treasury undertook, lee used libor as a reference rate. we are -- we had to make use of the best available and that at that time. you are raising that where we disadvantaged by that. we do not know whether we were not but we were looking carefully at that. >> when libor was used in those contracts, you and others have knowledge of the fundamental systemic concerns about its ability. so why was used in this context? surely there was another alternative and the federal government was calling the shots about the repayment metric. >> you are right.
we needed to choose what rate to reference and remitted judgment for the best at the time. we knew this rate was vulnerable to the type of practice be faced but we do not know whether we were disadvantaged by that choice. it is not clear at this stage what impact that behavior hat the rate up or down for investors to borrow. it is possible that people who borrowed money or advantage by this. it is picked -- possible people were disadvantaged. but we do not know the extent to which this happened. >> it is easy to imagine that make the banks that borrow money were advantage by manipulation of libor that artificially pushed it down. correct? if that happened, the taxpayer was disadvantaged. >> if you read carefully the sec
settlement documents, you will find that the attempted behavior went in both directions. when you do not know is what impact that had on the rate itself or the direction of the impact. that is a very important issue. it is an issue which those agencies and the other agencies part of the council are going to examine very carefully. it will be a matter of litigation as well. >> but you knew when using -- using libor that it was manipulated so why did we use it? >> that is not quite accurate. we knew the way the rate was designed where mostly foreign banks were presented estimates of what they might pay to borrow across these different currencies. therefore, any rate that is an average of estimates, there is
some risk in that context. that risk cost us to push for better reforms. >> but beyond that, you knew of reports of manipulation. >> we knew of reports of under reporting at that time. again, what we did in terms of choosing a reference rate is we had to make a choice among alternatives. that was the best alternative available at the time. you cannot say now with confidence that that points -- choice disadvantage the american taxpayer. but we will take a look at that. >> let me wrap up. it seems to me that treasury and the fed and the new york fed in new of basic problems with libor and charges of manipulation that under reported and pushed down the rate and then the treasury about that very magic for tarp repayment.
it is very clear that raises the huge potential of a advantaging those make banks and disadvantaging the tax payer. >> thank you, mr. chairman. i was reading that documents were released by the fed banks as early as august 2007. barclays tophet analysts about possible problems. -- told analysts about possible problems. you said you informed the securities and exchange commission, the fed and the cftc. let me just see my history. 2008, who was the president of united states? >> if you know the answer to that question, senator. president bush was president.
>> who were the appointees made by? >> by the president of the united states and confirmed by the senate. >> ok. so we start off with the reality that this was known to entities going back into the bush administration. and when you became aware of it, you raised it to all those of corporate entities that have the wherewithal to conduct investigatory abilities to pursue. is that a fair statement? >> that is absolutely a fair statement. with that in mind -- >> with that in mind, it is still challenging and troubling because obviously the reason that barclays entered into a consent agreement is because they did something wrong. and there is a manipulation of some sort depending upon the moment that you borrow, you might have actually benefited or have been caused harm.
considering how many mortgages and other commercial instruments are indexed to libor, that is a real concern. as we move forward, how has the treasury or the fed considered issuing our own american libor are using bank data when calculating in number? is that feasible? how do we prevent this from happening again? one of my frustrations is that we can attend the congress passed and have the president signed laws that define what is acceptable and unacceptable practices but we cannot seem to get the culture in financial institutions to except that. so can we have an equivalent of an american libor or other index that would be more transparent, less subject to any manipulation? and how do you get the culture
here to turn around? >> >> let me start with the latter question. you need tough rules enforced by people who got the resources to enforce them. there is no alternative to that. you cannot regulate for culture or ethics. you have to assume these institutions will have incentives to do the wrong things sometimes, take risks they do not understand. that is inherent. the job of government is to make sure there are tough rules in place that can be enforced and that requires resources, not just authority. we are looking very carefully at not just what reforms make sense to how libor is determined by what alternatives might be better for the system going for. we will do that very carefully and involve the relevant people. people briefed this committee in congress as we go to that process. -- we will brief this committee
and congress as we go to the process. set in london under a process overseen by the british banker'' association. it is a strange thing. it is right to think about what is a better alternative to that. >> i think the question is very right. i appreciate your answer to my question of culture. if we have the rules, the laws and if we give regulators the resources to pursue this, what we need is vigorous sanctions at the end of the day so people get the message this is not the cost of doing business. >> i agree, that is what enforcement means. >> my challenge with many of my colleagues who want to retract from those vigorous sanctions and the essence of the process
that would bring us to a determination when someone to be sanctioned, otherwise we will not change the culture and the american people will be subject to the risk of those to make decisions that ultimately create collective risk. and that is a huge problem. finally, i would like to ask you, can you tell us at the time that your testimony talks about european debt crisis remaining a looming challenge for the united states, with the possibility of default in certain countries, what have we done to know the full exposure of u.s. banks and other institutions to the debt of european countries? if they were to materialize at this point in time, what are we doing to limit the effects on americans in that context? >> very good question. the federal reserve has throughout the past three years not as carefully looked at how best to measure potential
exposure of u.s. banks and other financial institutions to those parts of europe, but as i said in my opening testimony, we forced banks to hold much more capital against the risk than they held before the crisis. banks have moved very aggressively to significantly reduce and limit their exposure to the risks he pointed out. that has happened in money market funds and by the way. it is important to recognize that europe is a very large part of the global economy. and the strongest economies in europe are very big and very consequential. so a prolonged financial crisis in europe goes beyond a long recession which -- means the export growth will be weaker and financial conditions will be tighter here. that would add to the pressures
we are facing on the u.s. economy. but u.s. institutions have much less exposure and hold much more capital and that is a good thing for us. >> thank you, mr. chairman. mr. secretary, thank you for being with us. i want to follow up on the discussion we had earlier. about the money market funds. i want to urge you to reconsider the position that the sec needs to adopt a new round of regulations now. i am not aware and we have not seen the evidence that the new wave of regulations already composed -- imposed in 2010 is somehow inadequate. we see the industry is on a stronger footing in dr. difficult times last summer without a single hit, suggesting they are in pretty good shape. this notion that i see repeated
often, they are somehow susceptible to runs, is quite ironic given that over the 40 year history of funds, there haven't been runs. so to suggest we need this new wave of regulation, some of the proposals i am concerned would destroy the product. the capital requirement i do not think is affordable. withholding requirement that they would badly damage the product. i would like to urge you to reconsider this. i think this is the wrong way to go. the question i would like to get to is on libor. there has been suggested that some of the british regulators may have known and may have condoned or even encouraged some misreporting during the french a
crisis for fear that otherwise a perception of risk that these banks might cause problems. i think and of the answer but for the record, did you or any other regulators actually condone or encourage misreporting of libor? >> i absolutely not. >> ok. that is what i thought. here is what i do not understand. that is, how you were aware of this in early 2008 and for the last four years, you never use the pulpit that you had to warn the american people. so there is literally hundreds of municipalities across pennsylvania engaging in interest rates swaps and receiving libor payments and we know and you knew that those libor payments may not be the correct payment. maybe very well less than what it ought to be getting. these municipalities did not know that.
and they should have. the second thing is, why did you not use the enormous influence you have had both at the fed and treasury, to persuade the financial institutions to adopt a different mechanism that would not be subject to this kind of manipulation? what's on your first question, i did what i thought was the most effective way to get to the heart of this. in general, you are right, there are some problems you can address by talking about them but generally, i am of the view is better to act on these things. that is what we try to do. these concerns to refer to, we are in the public domain at the time. the vulnerability we were worried about was there for people to see. between that
time when we acted and the cftc announced a settlement earlier this month, they were involved, to their credit, in a difficult investigation which ultimately uncovered the damage you refer to. it ultimately involve the sec and justive in that context. that process took some time but in the interim, the british did do something to try to reform. i do not think those reforms went far enough. but our system has to work this way. you have to combine reforms to the underlying problem which we set in motion with enforcement action. the consequences. that is exactly what happened in this context. >> i am not at all suggesting we should have had enforcement. my concern is knowing this rate did not have integrity, you
never the less stood by while thousands of transactions were being executed, interest rate swaps, loans, all kinds of agreements and it seems to me you could have used the enormous power the secretary of the treasury has to encourage and persuade the financial institutions to fix this or start using alternative mechanisms. >> that was exactly the objective of the actions i took at that early stage in the process. >> the market began some time ago because the market was broadly aware of these concerns. has started to of all towards other alternatives. that was driven by the recognition that their interests might be better served. >> i want to caution, it is important to take some time to carefully examine what was the impact of the behavior on those rates. i do not think we know with
confidence now the direction of the impact of the magnitude. that is a very important issue and critical to restoring trust and confidence in the system. i think authorities are doing a careful job of looking through that. >> i will close by staying -- say i understand we do not yet know the magnitude of the cost but we know this is a process that lacked integrity. i was to just some of the transactions that were entered into an resulted in significant losses might never have been entered into in the first place had participants understood the lack of integrity in this rate setting process. >> that is one reason it is important we did what we did. to set reforms and make sure authorities responsible for abuse and manipulation have the ability to act on those concerns. >> on the libor.
when the chairman of the fed was here the other day, he talked about the possibility of moving towards a more market-based alternative to libor. you mentioned maybe we should be thinking about that. what would those alternative look like? rather than having a rate that is voluntarily reported by a small said the banks, you might actually find yourself in a place where you have rates that were stressed test by the markets so we could really have confidence in what we were getting. >> you're absolutely right. one of the dominant question before the council is what would be better alternative? and what transaction based rate would better serve the broader interests of the market? there are other parts of the
financial markets where they rely on surveys estimate. they do that for a very practical reason. during that does not necessarily make it vulnerable to the types of incentives on this case. we will look at all those options and we will be happy to brief this committee as the thinking involved. >> i think there are probably some situation where the market is lagging because transactions are not actually happening and you can see where you might have a market rate that would work but it would seem there ought to be one that could replace libor. robert samuelson had a piece in the washington post this week called the $12 trillion misunderstanding. he counts for how we got from a projected budget surplus of $5.60 trillion that was made in
2001 to where we are, which is $6.10 trillion. he says this is how we got here -- the biggest cause was the recession itself which is about 27%. if you add that the recession and the tax cuts on the early you are at 40%. increase to defense spending, 5%. the obama stimulus, 6% and so on. his conclusion is most theories turn out to be exaggerated or misleading. there were lots of causes. no single cause dominates. i would like to enter the article into the record. i think he clearly lays out a
comprehensive nature of how we created this problem and the reason why we are going to need a comprehensive solution to get out of this problem. after think about coming to the end of the year, it seems to me maybe there are four alternatives to what we face. we could go over the cliff. we are driving the american people over the cliff if we do not do something. so we collect a sequester go into effect and taxes expire. we can do as we have done for a long time and continue to kick the can down the road and say we did not really mean it. so we're going to turn around and just listen or extend a tax cuts. we could solve the problem in a comprehensive way during the lame-duck session or put some process in place to try to get us to a solution in the new year.
could you talk about -- are those the only alternatives? and second, how the financial markets to those or what would be the most reassuring thing we could do for the american people? not to repeat the travesty of the debt ceiling discussion last summer. >> i agree that if congress were to choose to try to defer everything, tax cuts, and sequester, and do nothing about the long-term fiscal position and nothing to help growth in the short term, that would be very damaging to the country. to say that as a nation we have no capacity to come together on a set of reforms to address these problems and have to go off the cliff seems deep sleep responsible. so i think the solution to this
problem has to lie in -- there has been a lot of foundation laying by you and others over the last year in particular. a solution has to lie in replacing those expiring tax cuts for middle-class americans and the sequestered with a balanced mix of reforms that would raise a modest amount of revenue and make our commitments to seniors more affordable overtime at the preserve room to invest in things necessary for us to grow. that is the way it has to be resolved. if we were to do that, that would be good for confidence in the economy and uncertainty. it would demonstrate what the world has always believed about this country -- we come together and do the necessary thing. >> mr. chairman, i apologize because i know my light is red. one follow up question.
i have learned some much so it has been good. i do not believe there is enough of this around this place but at home, people do have a sense that we are all in this together. the we have to come together and fix this together. police in colorado, they are sick of the partisanship on this topic. could you give a sense of what the scale we would be asking ourselves to commit to versus what they have to do in europe? and what we would be asking our generation to do to secure the future for the next generation as a relative matter to what people in other countries will have to do. >> excellent question. to get our deficit down to a level where the debt stops growing, we need to do it on top of the $1 trillion of saving
congress enacted last year. we have to agree on roughly $3 trillion of additional savings. that seems like a lot but it is only about 2% of the national output in come this economy creates. that is a very manageable challenge for a country like us. if you do it carefully with sensible reforms on the tax side and carefully designed savings on the spending side, you can do it without causing any damage to the growth prospects of the u.s. economy and the basic confidence and security retirees have people have for health care. even the basics that heat -- safety net for low-income americans. are vastly greater -- their growth potential as a speaker and their populations are much older. the size of government are dramatically larger.
the generosity of their commitments are higher. our challenges, although they peel daunting, are completely within our capacity to act. that is why it should be within our capacity to sell. we cannot control what europe does. it has a big effect on us but they are not within our capacity to control. these things are completely within our capacity control. >> thank you, mr. chairman. >> mr. secretary, i appreciate senator bennett being here the whole time. i can assure you i have been watching on television and i have learned a lot as well. i have got some prepared
questions. the follow-up on what he says. these carefully structured savings -- they have to include savins in -- savings in the anti-saddam programs like medicare and medicaid. that is correct, right? the witness is nodding his head. >> that is correct. the long-term deficit are driven by most of the aging of america and the rising health care costs. >> the medicare program, i think we have all -- a program that grows at three times the rate of inflation cannot be sustained. that is medicare at the present time. >> that is right. i think even with the long-term
savings in the affordable care act and even with promising slow-growth in health care costs, long-term projections still show unsustainably rapid growth. mostly because more americans are retiring and the cost of health care is still rising. >> i think also -- while we appreciate the importance of the savings in the budget control act, i think we agree with secretary panetta that the meat ax approach of a sequester is not helpful to the economy. is that your view also? >> the sequester was designed by the republican and democratic leadership, not because it was good policy. it was designed to force this body to make some compromises on a set of long-term reforms. >> now is the law of the land and we did not get a result of
the super committee that we wanted. you agree it is unsettling for the economy to be facing this approach, particularly in defense and other important discretionary programs between now and the end of the year? i would say it differently. what is damaging to the economy now is the combination of findlity of congress to legislative majorities to do things that would help growth, as well as an inability to come together and agree on a balanced package of fiscal reforms to replace the sequester. both those concerns are weighing on the economy. the direct effects of europe -- it is a risk. it is referred to in the council
report. we all have a responsibility to try to demonstrate to the american people and the private sector that this body is going to be able to come together and make some tough choices on the balanced package of reforms. but the sequesterif congress wet them, that would not be good for confidence, because it would leave the world and the market's concerned that it is another symptom of the inability of democrats and republicans to compromise on things that are in the interest of the country. >> my clock is ticking too fast for us to go on with this, but let me just say, there is the looming sequestered is hurting economic confidence as we speak. it will make the economy worse between here and between today and the end of the year.
i do not want that. i do not think you or the president wants that. i have in my hand here report, the office of that special investigator of this, dated yesterday, but it has been out for a while. >> i have read a summary of it. >> in your testimony you state the tarp bank investments have produced a profit for the taxpayer of over $19.5 billion and on current estimates will generate a profit from tarp of approximately $22 billion. the tarp report appears to contradict that quite substantially. this report states tax payers are owed $109.1 billion as of june 30, 2012.
the treasury department has written off or realize losses of $15.6 billion that taxpayers will never get back, leaving $93.5 billion in tarp funds outstanding. this seems to be a huge inconsistency and i would like ask you to explain why there is such a different take from your testimony and the inspector general's report? >> the $20 billion estimate refers to the investments in banks made with the party that congress gave us at the peak of the crisis, and we have realized 20 but dollars of returns. if you look at estimate -- estimates of the remaining exposure, if you look at the full complement of exposure that the treasury and the fed took to protect the economy from a failing aig, on current estimates, the taxpayer in that case, too, is likely to realize
a modest return. looking at the full complement of exposure and risk, the government took, not just a fad, but the treasury as a whole, and we still own some common equity in aig which we have begun to sell and expect to sell down significantly over time. as important as the results on how carefully we have managed the exposure, it is important to recognize that the fed and the treasury moved aggressively not to just replaced the management of the institution, but bring down the risk in the risky parts of the entity that put in jeopardy dramatically. alongside what the insurance companies have been doing to make sure that the activities of aig are monitored, we have been aggressive and bring down the risk. the notional derivative exposure, which was the center of the vulnerability, has been reduced by 90%.
aig has been in a less risky today, a very different firm, and most estimates look to the government possible exposure, and this is a remarkable thing that is likely to show the taxpayer earned a modest return. life is uncertain. we have substantial exposure in the equities. that is a remarkable outcome not seen by anyone at the time. >> you disagree with the conclusion of the inspector general, unlikely to get some of these funds back ever? >> all we can know is what the remaining exposure is and what the market values the exposure to date. people might take different views of what happens to the tax payers remaining exposure as the world evolves. that is something we do not have certainty over. there is some states in the world where that may not turn
out as well. on current estimates, it looks favorable, and most of the exposure has already been recovered. >> thank you, mr. chairman, and i appreciate secretary geithner your being here today. i will ask only one quick question. some of the questions have been asked. fsoc recently exercised its authorities when it designated market utilities. these companies which are referred to as the plumbing of the financial system has not challenged those determinations. the timing of these mid-july determinations made it impossible possible for the fsoc to include a discussion of the -- in its updated report. why were those eight firms selected, and will there be other firms selected for a
designation? what does that designation means going forward. >> two types of designation authority provided in the reforms congress enacted. the ones you refer to specific date involve key parts of the infrastructure, and we designated eight firms. we have the authority to make sure they are run with conservative christians against risk. we're protecting the system from systemic risk. we went through a very careful process within the council to identify the criteria we should use to decide where we needed to extend that authority, and we went through a carefully designed process to make sure we gave the firms the opportunity to provide better information for our judgment to contest it. they seemed broadly comparable with the outcome.
we have remaining authority that we have not yet executed, but we will, to designate large non- bank financial institutions as who could pose risks to the broader economy. that reason, why it is still important, is all you do islamic beveridge and capital for the banking system. you have a huge system to emerge. it is important to protect the system to make sure you have the authority to extend those safeguards, leverage limitation, for example, the firms in the business of things banks do to threaten the system. safeguards to firms that are in the business. that's what we're examining no >> thank you. thank you, mr. chairman.
>> senator warner. >> thank you, mr. chairman. let me first of all start with a following up on what senator wicker said and i would concur with him that we want to avoid the sequester at all costs. my state is contingent on defense costs. i would find it stunning that if all we did was simply by off 55 been dollars -- buy off $55 billion in sequester cost and say that is the limit of our responsibility -- we need a minimum of $4 trillion as you have said, and as we all care about our country's security and national defense, but i wholeheartedly believe the
former chairman of the joint chiefs when he said the greatest single threat to our country is not terrorism, but the threat of debt and deficit. those who say all we have to deal with the sequester, just the defense half, to me, and i do not think senator wicker said this, but that should be our own the top priority is a stunning comment to me, and i do not think addresses the concern we face. i would hope that we could perhaps, with your assistance, size at you mentioned the challenge of up to five delete -- up to $5 billion that would move revenues closer to his start numbers, bring spending down, reform entitlement programs.
it is being so much smaller than what is being asked the people across the world. so in circumstances in india and china, and the more we could frame that i think would be helpful. i would want to come back to libor, but i listened with some irony and as somebody who is not fully following this as closely as you, but here was a circumstance reported in the press, "the wall street journal ," other papers at the time, which had regulators in britain, a host of regulators in the united states, treasury officials in the united states, and to my knowledge the only guy that actually sounded the alarm and said we ought to be looking at this was the then-new york fed president, and yet you seem
be getting a disproportionate share of why not more when there were a host of other folks who would at least have equal or greater responsibility in acting on this matter. there is gone to the question here. one of the things that i think my colleagues pointed out and we all scratch our heads, you pointed this out, we've moved to outcftc, to start enforcement actions, and we say does it really take four years to get enforcement action through? one of the things that concerns me is the nature of these enforcement actions, because of their confidentiality, what would happen if an enforcement and to the feels they have got to do this in a confidential basis, and get the actions may
end up posing a systemic risk? how do we get that right under the guise of confidentiality, a regulator is free to let these trivial to fsoc this is not only potentially criminal, but the action in itself may be systemically risky, and we cannot wait for four years for the investigation to finish before we bring it for? >> a good question, and i thank you for raising it. this is a solvable problem. what it requires is that the enforcement agencies have in place safeguards so that when, if they find it necessary to bring to the attention behavior that has systemic implications to other agencies, like the fed, they can do that without jeopardize the investigation. there is precedent for doing this. we did not have in place types of mou's that are agreements that would give them that
satisfaction, and we are trying to fix that quickly. >> this would be something i think we ought to look into a bit more to make sure -- i can just see some systemically risky action being caught up inside an investigation and we created an fsoc to make sure we had that brought overview. we should urge the treasury and others to get these fou's in place. place.s in a lot of concern about the voluntary actions of the financial institutions to contribute to libor and maybe the sense that some of the incentives may not have been right, to make sure that folks were coming clean. are there not across the whole financial system a whole series of other voluntary actions were financial and said he isn't --
financial institutions are asked to contribute information that could be subject to manipulation and we have a whole swath -- i think of the chairman and the ranking member as we went to the financial crisis -- that are more self-policing? not that we want to create massive new amounts of less and regulations, but how do we make sure that in the light board this month that there is not fun to be one of these voluntary industry-generated self- regulated bodies -- out to be put a warning out that everybody needs to be coming forward with clean information? >> this is something the council is looking at now. there are two different sets of examples. one is where you saw the british bankers' association, a libor, and we're looking carefully at survey-based measures of financial crisis that are set by industry bodies to make sure they are not
vulnerable to this. there is a different example we have recently, in the ferrier of the company, which puts out and this is true -- the failure of a company, which puts out that this is true, regulators rely on so-called self-regulatory advice to carry the burden for the audit. as you saw in that case, that puts us in a position where you ight have a customer's funds more vulnerable to fraud. i do not know where that will take us, but we want to address both of them. >> one of the things may be that many of these entities work and do self-police rather than try to create some huge new government structure, we may want to look at how we can look
at the panel decide, if there is bad behavior within these voluntary organizations, what we might -- to make sure we do not have to create a whole new artifice. i was hoping i would be the last member and had one more question, but i see my colleague is coming. i am 3 minutes over. >> i need to get settled. ask a nice long one. >> can i get one more brief one in? >> permission granted. >> although i am following -- falling into the hepa christie category as well. the last quick comment i would like to have, an interesting comment by one of the architects of the collapse of classical. -- glass-stegall.
one of the things that, as we were trying to sort how you get to the right balance, was the ability of these liquidation plans or funeral plans to help try to regulate size. you see a lot of banks trade below book value. sides may not be this big an asset in terms of how the market views it. are you starting to see these tools change behavior? >> congress thought about this long and hard in considering financial reform. it put in place a set of pretty tough new safeguards in the system, and among those are higher capital requirements or authority on the largest institutions. it means if you are among the largest in the world you have to hold more capital against the risk you take than is true for a typical bank. that is one.
two, it is not just living wills, but there is broad authority in the law limits the ability of the government to come and save these firms from their mistakes. we cannot protect them from that. that is very consequential. there is authority in the law for regulators to break up the size and scope of its positions in advance if they believe they post to much risk to the system. my own sense of what is happening right now is the full effect and impact of those reforms, as they get traction, are starting to have people reassess what is the right mix of scale and scope and size that is appropriate for investors. it is forcing this examination. but we will do is continue to look at any idea that helps satisfy this basic obligation we
have come to create a system more stable, less vulnerable than we saw in 2008. but we have much tougher framework in place today than we had before the crisis. we want to make sure we do not see that we can buy all the pressure we're facing, to weaken as reforms. >> senator schumer? >> thank you, i appreciate you being here and waiting and appreciate the secretary. first, there has been a lot of discussion about libor in recent weeks, about who knew what and when. and whether various regulators should have done more to crack down on allegedly and the deletion of libor. this is a serious issue. the potential impact is pass. it goes in different directions. if people wanted a low libor, they would lower credit-card rates, said it is hardly as clear-cut as some are making it. i am puzzled by repeated claims that you and other regulators to buy and did nothing and that somehow we're just learning
about this for years later. you and the new york fed were pro-active, not only by raising concerns, but proposing structural solutions, and barclays just reached segment with u.s. regulators, and it was the fed working on this investigation, and those did not just turn up two weeks ago. they have been going on for a long time. the idea we did nothing for four years is false and some are taking unfair shots i you. -- at you. obviously you have to answer every question, and overall i would say this -- i think you have been a very fine public servants, from the days when we first met, when we were dealing with the tarp and the stimulus, both of which say to our country for what i thought would be a great depression, and you have
been smart on the merits down the middle. you have stood up to the financial-services industry when you thought they were wrong. the full court rule is an example, but you did not-then needlessly. i give you kudos for that, and somebody should say it, so i did. i have a question for you on our favorite subject, where we disagree, big country over there on the other side of the pacific ocean. undersecretary brainerd china's economy is too large for us to pick and choose which rules to follow, which is what the chinese have done constantly. president hu made significant commitment to create opportunities for americans to export and sell to china by increasing market access and leveling the playing field by eliminating several barriers to
trade from foreign firms. these reforms would significantly bolster u.s. investment in china, but you know what? i do not put much credence in them because we have heard commitments like this over and over again with very little result. what progress has china made to live up to the commitments they made this spring to increase foreign market access? what concrete we have they done since that speech by president hu, in light of proposed action ? >> i do not think you and i disagree on this. we disagree a little bit on how best to promote our interests. the basic problem that we agree with and your right to give it attention. i would be happy to have my staff make out to you exactly where they are on that specific piece, opening up the broader investment of u.s. firms.
our interests go much farther. it is not just making sure the exchange rate appreciates over time. the trade surplus comes down, it has the bat -- dramatically, but we did not provide much protection for innovators. there's a whole range of disadvantage is that need to face over time, and it is not tenable for china, which has a world-class manufacturing sector to continue to maintain these protections for its firms. >> specifically, since the president gave a speech, i would say the chinese trade deficit has come down, but not with the u.s., not with the u.s. has come down worldwide and that you're alive, but not with us, as i read the numbers. >> u.s. exports are growing rapidly to china, and that is a very good thing. >> final question, if i might.
this is about the fiscal cliff and the middle-class tax cut bill the senate passed today. the slowdown in growth could be exacerbated by concerns about approaching tax increases and spending cuts. mr. de the senate took action to eliminate a major piece of that certain -- yesterday, the senate took action to eliminate a major piece of that uncertainty. extension >> the rate itself of s a 100 been dollar tax increase on americans. >> numbers i have takes $130 billion out of 21%, and not? >> it goes to the tax rates that 98% of americans pay. >> have 92 at of 607, said that
is 50%. up 36%, that is a lie. how much protection from the hit with the house passage of the tax bill before the country? my numbers are 41%. that number understate it because what people count in the overall number is already expected and planned for. the thing that would be most damaging to confidence would be the tax of the middle class americans to go up, and as you know, if you let them expire, is a special tax increase. it is not just -- you do not need to just extend the rights and the amt, but you need to make sure you extend the expanded tax credits we put in place in 2009 that the to 25 million americans. if you do not, then taxes go up
for 25 million americans. you need that fold mix of things. if the house were to enact that, that would take care of the most damaging piece and of the year uncertainty. , there are other issues here, he should pay but, but if you are carrying about uncertainty, the number one thing republicans could do is pass our tax cut, which we agree on. we may not agree on what to do the people above $250,000, but we agree on what we need to do on the people under $250,000. if they do not pass our tax cut, they should stop talking about uncertainty. >> it is necessary to do, and there are other things he could do to make growth stronger. we all want to see compass come together on some set of reforms
to help reduce the long-term deficits. >> thank you. appreciate it. >> thank you again, secretary geithner, for being here today. your work and the work of the council is great be appreciated. to my colleagues and our palates, i thank you for being here today. this hearing is adjourned. [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> visit the kentucky city named for louis xvi. >> welcome to the historical society. we have been collecting and amassed over 128 years a phenomenal collection. >> everybody has heard of the lewis and clark expedition.
what many people do not realize is that the lewis and clark expedition has deep roots here in unifil and in kentucky. many historians believe this is the only verified and artifacts from the expedition. it is the horn of a bighorn sheep. we know for information that we have on the family that it was used as a doorstop. >> commission on presidential debates released the locations and dates of this fall's presidential debates. four 90-minute debates. the first takes place on october 3, the second, october 16, and that will be at hofstra
university. the final debate on foreign policy taking place october 22 in florida. the debates take candid it's to some swing states, and one red state and a police state. more details coming. u.s. house finished up its work today, passing a resolution condemning the shooting last week's in colorado. the completed work on a bill that curb federal regulations. they're back on tuesday for morning in speeches at noon. next week they will take up the two dozen one-2,000 feet extension of those tax cuts. also possible work on dropped problems in the u. s. boehner spoke about this this morning at his briefing.
>> good morning. by the end of next week and only the house will have acted to address the tax hikes that threaten our economy and the defense cuts that threaten our security. that is because only republicans have offered plans to address these threats. yet it was the president who came up with the sequestered because he did not what the debt limit to get in the wake of his campaign. these arbitrary cuts are living and he is nowhere to be found. it was the president's proposed tax hike because he thinks if you run a small business you did not build it. the government did. since he thinks the private sector and small businesses are doing fine, he believes it will not hurt to wait -- to raise their taxes. the president is campaigning tried to tell everyone who will listen that he did not mean what
he said, that he did not mean you did not build it. mr. president, i will tell you what, if you want to show you stand with american small business owners, the best thing you can do is drop your plan to increase their taxes on january 1. this small business tax hike will destroy more than 700,000 jobs, and next week the house will vote to stop the small business tax hike. we will also vote to start a program of tax reform that will help employers to keep jobs in america and bring jobs back to america that have gone overseas. we will give the democrats an opportunity to vote for the president's small business tax hikes, and if they did, the american people will hold them accountable. should also come together to address the threat from these arbitrary defense
cuts. while we're at it, we should get over to the president's desk the more than 30 jobs bills that the house has passed that sit in the senate. the president may be checked out to the point he has not been able to meet with his jobs counselor, but the american people are continuing to ask the question, where are the jobs? they expect us to work on this matter where we are in the campaign or what time of year is. the house will continue to focus on the issue of most concern to the american people, and that is the economy and jobs. >> will you about a house vote bill? senate-passed tax >> we are more than happy to give them a vote. >> there is a report -- so you will have a vote on the senate
bill? >> will see what they will offer. [unintelligible] >> with 2/3 of the country now and drought, -- in drought, and food prices expected to rise by at least 4% next year, do you plan at this point to allow some kind of drought package, particularly -- [unintelligible] particularly for livestock producers, keep you plan to allow some trout package on the floor as part of the farm bill or as an extension? >> i believe the house will address the livestock program.
unfortunately that in the last farm bill was only authorized for four years. we will continue to work with the chairman and it committee on an appropriate path for. >> as part of a farmville or extension? >> the president said last night that guns like ak-47s should belong and -- should not belong in the hands of children. d you agree with him now and would you be willing to be part of that conversation? >> ak-47 are not allowed to be in the hands of criminals. that is the law. if the president has proposals on the other ways we can address criminals and owning guns, i will be happy to look at them. [unintelligible]
whoa, whoa, whoa, whoa. >> given the scale of issues that that country faces, have you made a personal effort to contact president obama? >> i have not. my arms are always wide open. he has not had time to meet with his jobs council in the last six months. i am not surprised that he has not had time to call me, no. >> [unintelligible] >> [unintelligible] look at all the laws we have on the books to make sure they are working as they were intending to work. that would be the most logical step forward. >> peter pelosi has written you a letter to ask a bipartisan
group before the house goes on recess. are you going to present the president's alternative proposal? [unintelligible] >> it is important for the office of management and budget outline to the congress and the american people how they intend to enforce the sequestered. were these reductions in spending will come from. it is the fair thing to do. i think clearly congress has a right to know. >> you plan on putting russia -- to grant the vote -- to plan to give russia a vote -- [unintelligible] >> if the president thinks this is an important issue we have to
deal with that, maybe he should be making the case for it. i have not seen that as yet. >> will the house republicans permit or not permit funding for the regulation requiring all health care plans to cover sterilization, contraceptives, and -- [unintelligible] >> we have not had conversations about what would be included in the c.r. >> next week the plan to actually require health care plans to include contraceptives goes into effect. you said last year that you would introduce legislation to address that. it never came up. what do you plan on doing in terms of that? >> we are continuing to work with those groups around the country who believe their religious liberties are being infringed to try to come to a
resolution of this issue. sometimes resolving these issues can best be done other than legislative avenue east. we are continuing to work with them on the best way forward. >> the six-month stopped at for funding -- >> we are considering lots of things. >> why? >> [unintelligible] >> will you say to voters who feel that congress is a do- nothing congress? >> i would hope with our colleagues in the senate, we will work with them to make sure that that government is funded and no opportunities for games to be played and we have something to announce. >> [unintelligible]
>> i do not know. i am not the expert. if the president has ideas, i would be happy to look at them. thanks. >> the house finished its legislative meet today, approving a resolution condemning the shooting last week in colorado and honoring victims. they pass a bill that would freeze regulations. they're back next week. after voting was done today, the majority leader and the democratic whip talk about next week's schedule. ma session but no votes are expected. on tuesday the house will meet at noon for morning hour and 2:00 p.m. for legislative business. votes will be postponed until 6:30 p.m. on wednesday and thursday the
house will meet at 10:00 a.m. for morning hour and noon for legislative business. on friday the house will meet at 9:00 a.m. for legislative business. last votes of the week are expected no later than 3:00 p.m. mr. speaker, the house will consider a number -- mr. hoyer: mr. speaker, the house is not in order. the speaker pro tempore: the house will be in order. members at the back of the chamber, please remove your conversations from the chamber. members in the back of the chamber, please remove your conversations from the chamber. the gentleman from virginia. mr. cantor: mr. speaker, the house will consider a number of suspensions on tuesday and wednesday. a complete list of which will be announced by the close of business tomorrow. in addition, the house will consider two bills under rule to stop the taxikes and provide for a comprehensive tax reform. h.r. 8, the jobrotection and recession prevention act,
spsoreby chairman dave camp. and h.r. 6169, the pathway to job creation through a simpler, fairer tax code act, sponsored by chairman david dreier. together, these bills will ensure that no american faces a tax hike on january 1, while providing our small business men and women with the certainty to grow and create jobs. finally, mr. speaker, the house may consider legislation related torograms and disaster assistance under the expiring farm bill legislation. i thank the gentleman and yield back. mr. hoyer: i thank the gentleman for that information. as the gentleman knows, he was unable to have the colloquy last week, and so mr. roskam and i talked about the schedule. and last week the chief deputy, the majority whip, mentioned we would be voting on the tax bill, as you have done, and he also mentioned that we would be given the opportunity to offer a substite amendment on the
floor of our choosing. is that still the plan of the majority so that we'll be able to offer that legislation? i yield to my friend. mr. cantor: mr. speaker, i didn't understand the gentleman's question. mr. hoyer: my question is, last ek we had a colloquy and mr. roskam indicated that we would be offer an amendment, not just an m.t.r., but an amendment to the bill. now we want to know whether it was in the fo of a substitute or amendment, but in either event, asking, mr. majority leader, whether that's still the case and whether or not such amendment will be obviously protected under the rule for such waivers as may be necessary for the pie of legislation that the -- mr.
roskam referred to. mr. cantor: again, without having privy of the conversation of the gentleman from illinois and my friend from maryland, i can say the minority will be afforded the opportunity to offer the president's tax plan, not just his motion to recommit, but certainly as a stand-alone amendment as well. mr. hoyer: i now -- let me be more precise then because i'm not sure whether or not the definition of the president's plan. in his weekly press conference just a few hours ago or maybe just a few minutes ago, mr. boehner was asked if we would be allowed to vote on the senate tax bill to which he responded, if our democratic colleagues want to offer the president's plan in the senate, then we are more than happy to give them a vote. i said that just a few minutes ago. our intention will probably be
to offer the bill that has now passed the senate which will protect middle-class taxpayers from any tax increase, as think your party, mr. leader, and my party agree on. mr. speaker, i would hope that we would be able to ofr that alternative on the floor with such protections as wod be necessary, consistent with what speaker boehner has said. i yield to my friend. mr. cantor: i say to the gentleman, again, it is our intention to allow the minority to offer as a motion to recommit or a stand-alone amendment the president's plan. obviously we have to see what is being offered, but that is the intention consistent with the speaker's remks publicly today. mr. hoyer: mr. speaker, i would hope we would not pars -- parce
words, mr. leader. we had some discussions on this and the majority party, when it was the minority party running for office said we would have open, full debate. mr. boehner has saidn the pledge to america that's what you wanted to do. now, you keep parcing your words. the president'plan is the bill that passed the senate just a few hours ago yesterday. that's the president's plan, i tell my friend. and if in fact mr. boehner's words are to be as something other than that, he says if our democratic colleagues want to offer the president's plan in the senate -- now, obviously we can't offer that plan in the senate. we're house members. so my presumption is, mr. leader, that that means if we want to offer the senate plan, which is now the president's plan, i tell my friend, we're more than happy to give them a vote. i hope that's accurate. i hope that can have a full
and open debate on that issue but i hope that the republicans' side of the aisle, mr. speaker, does not choose the amendment that we are to offer. let us choose it. and i hope we could clarify that so that we would know and the american people would know that we have a plan now passed by the senate. and we have a plan also that was defeated in the united states senate. i don't know whether your side intends to offer exactly the plan that was deated in the united states senate, but it was a plan tt the president of the united states, as the leader knows, said he won't sign. so what i ask my friend respectfully so we know what to prepare for and we know it will be made in order that consistent with the clear meaning of this statement that
mr. boehner made just a few hours ago is that we would be given the opportunity to offer the senate-pass plan and would have a vote on that plan, either in the form of an amendment or a substitute. and i yield to my friend. mr. cantor: mr. speaker, i would say back to the gentleman, we do expect and our intention is to allow your tax hike to be made in order. i mean, i don't understand, mr. speaker, how many more times i have to say that. the speaker has always represented that we would work towards an open process, and i would remind the gentleman that when hisarty was las in majority and considered an expiring -- the extension of expiring rates in 2010, that his party made in order just one amendment to h.r. 4853, for their own member, mr. levin. not for the republicans. because we were not offered a single amendment. we weren't even offered a motion to recommit.
in fact, the pelosi-led congress denied us a motion to recommit on 47 separate occasions. so i would say to the gentleman, again, the speaker has been consistent throughout. we intend to continue to strive towards an open process. we intend toffer you a motion to recommit, a stand-alone amendment if you want to offer a tax hike twice. that's our intention, yes, mr. speaker. mr. hoyer: i thank the gentleman, and i will interpret that, mr. speaker, as indicating that if we choose to offer as an amendment the bill that passed the senate, which ensures that there will be no tax increase on 98% of americansthat we would be allowed to offer that bill and it would be protectednder the rule in such waivers that are necessary will be extended. that's how i interpret that. if i'm wrong, perhaps the majority leader can correct me. i don't want to -- parse words
or lead to confusion. . i know what the senate bill is. and it is at this point in time our intention to offer that senate bill as an amendment to the bill that's offered on this floor. so i would hope that our understanding is consistent again, and i want to say consistent with the speaker's comments that that will be allowed. i want to say to the gentleman as well i think he's appropriate in referencing the past, and i'm plead that he's not following such precedence. mr. cantor: i appreciate that, mr. speaker. i say to the gentleman thank you for that note. i know the gentleman is coinuing to express his support for the president's plan . as the gentleman knows our colleagues on the republican side of the aisle in the senate feel as strongly as we do over
here in the house that the president's tax plan as was demonstrated recently by a nonpartisan study will cost the economy over 700,000 jobs. the gentleman knows our position on that and we intend to again allow for that vote to occur and look forward to a robust debate that will enview. i yield back. mr. hoyer: i thank the gentleman. i think that clarifies it. he and i both look forward to that robust debate t will clearly differ, mr. speaker, on the impact, of that vote. but there will be no dispute that it will ensure that 98% of americans, every working family, 100% will not pay any additional taxes on the first $ 50,000 of -- $250,000 on their income which we think gives confidence to the people and the economy. we think it's appropriate step to take. i appreciate and look forward to
that debate whic i think is an important one for the american people. i would also like to ask the gentleman with respect to the farm bill, he mentions in his comments, there may be some vote on the farm bill. the senate passed a bipartisan farm bill, as the gentleman knows, it saves very substantial moneys, will contribute to reduction of the deficit. can the gentleman tell me whether or not the house passed farm bill will be brought to the floor, or whether some alternative will be brought to the floor? i yield to my friend. mr. cantor: mr. speaker, i say to the gentleman that we are tipping to work with chairman lucas and our members to determine the best wayorward. i would say to the gentleman that the senate bill he refers to does not have a majority of support in the house, and
actually would ask the gentleman if he would respond to the question whether he supports the house farm bill. i yield. mr. hoyer: i do not. support the house farm bill. my committee, the committee that -- we don't have a chairman of, the house agriculture committee, ashe gentleman knows, but as he knows the ranking democrat does support that farm bill. so it has, as the gentleman likes to observe on many occasions, it does have bipartisan support. he asked for my personal opinion, and, mr. saker, i have given him my personal opinion, but that bill itself will save substantial dollars and bring down the deficit, not as much as the senate bill, but it will have a positive effect on the deficit itself. in either event, however, we
have some real discretion -- distress in farm country, very substantial drought. they are in great need of making sure that there is some way to assist those farmers who, through no fault of their own, but througthe fault or the result of whether conditions, lack of rain, are in distress. so we believe that something ought to be brought to the floor that will, a,ot exacerbate the deficit and, b, help the farmer. i yield to my friend. mr. ctor: mr. speaker, i would say to the gentleman i'm glad to hear that the gentleman would like to support an effort to address the need for drought assistance and perhaps other programs that have or will expire, and i look forward to perhaps his support. if that's where we end up next week, allowing for that vote to occur and his suppt.
mr. hoyer: i thank the gentleman. hopefully we can agree on how to do that. again without making the deficit worse and adding to that and hopefully helping farmers at the same time. let me ask the gentleman,here are two very important bills that were passed. one in the senate. again with an overwhelmingly bipartisan vote, and here with not an overwhelm bipartisan vote, and the violence against women act, a ver very important subject that has been in -- there was a very significant 62-37 vote in the senate -- excuse me, that's not the exact figure. that's on the postal bill i'll ask you about in a second. 68-31. 68-31, even more bipartisan than the postal reform bill.
back on april 26 some months ago with 15 senate republicans joining in favor. i don't see that on the schedu. i don't know whether the gentleman believes it's a possibility we'll be able to pass that bere the election. i yield to my friend. mr. cantor: mr. speaker, i respond to t gentleman and say as he knows the senate bill is unconstitutional because it contains revenue measure in it. soe are unable to get to conference with the senate. i think i as well as the speaker have indicated that we support going to conference with the senate. they need to produce a bill so that we can go to conference and effect the passage of that very important legislation to allow for the relief money to get to the victims that that bill and legislation is designed to protect. mr. hoyer: i thank the gentleman. of course the gentleman knows that would be a very simple cure to simply drop the senate bill,
which has overwhelm bipartisan support, into a h.r. ll, a house bill, that would cure that deficiency. i agree with the gentleman. i think that's wl-known. but that's a technical issue. if we have agreement in both the house and senate, put that in the house bill and pass it. so i think we can act on it. i yield to my friend. mr. cantor: mr. speaker, the gentleman knows the senate bill can't pass the house. we are trying to produce results for people and particularly for the victims that need that assistance in that bill, and believe that this -- our bill, the vawa bill that passed the house can pass the nate. again it would say that the senate bill is unconstitutional and it can't pass the house. it seems to me that the best way forward is for the senate to agree to the bill which pretty mu extends esting legislation with some minor changes so that the victims of
abuse neeng the assistance can actually begin to -- can actually receive that assistance. mr. hoyer: i thank the gentleman for those comments, mr. speaker. mr. speaker, as the gentleman well knows, the house bill excluded in large number of people from protection. a large number of members -- people who werthe victims of domestic violence from protection. as contracted -- contrasted with the senate bill which was designed to ensure protection of all people who were subject to domestic abuse, and designed to encourage people to make complaints against those who abuse them. without fear of adverse consequences to them. so that we could get abusers dealt with in a proper way. and again i would say to my friend, mr. speaker, that 2/3 of the united states -- over 2/3 in the united states 123459, -- senate w. an overwhelming number
of republicans as well, voting for the senate bill because they believed it was inclusive. of course every woman member of e senate, republican and democrat, who probably have greater insight into domestic abuse than perhaps some of us males and male colleagues have. i would hope we could focus on trying to reach agreement and not -- which we did not have in the house as the gentleman knows. we had not an overwhelming bipartisan support in this house at all on the bill that was passed. so i would hope that we could compromise, cure the technical difficulty that the bill -- senate bill passed because the gentleman is right, has a fee in there. has to initiate in the house. but the gentleman also knows if included in the house bill that
defect would be cured and we could pass it. i yield to my friend if he wants additional comments. mr. cantor: there are many women members of our conference that are co-sponsors of that bill, and i know of at least one if not more who have been subject to necessaryic abuse and feel that our bill does provide the necessary protections for everyone who is subject to domestic abuse. and feel that the bill does address concerns the gentleman raises, and in the business of trying to produce results rather than to dwell on where there are differences, if those individuals who sponsor the bill and who have unfortunately had experience in domestic abuse, as well as law enforcement, if that is the case, certainly those individuals would know about it more than the gentleman or i, i think we ought to go about passing this bill and allow for the senate to go ahead and do soo the victims of domestic abuse can actually receive the
protections andssistance they deserve. mr. hoyer: i thank the gentleman for his comment. as i interpret that, mr. speaker, pass the house bill or no bill. pass the house bill that had 23 republicans voting against it. pass the house bill and reject a sena bill that has 68 united states senators. mr. cantor: would the gentleman yield. mr. hoyer: certainly. mr. cantor: i say to the gentleman. we really do want to go to conference with the senate. ok. so it's not pass the senate bill or no bill. we want to go to conference with the senate, mr. speaker. i have said that. i do take exception with the gentleman's remarks. mr. hoyer: let -- reclaiming my time. i'm pleased to withdraw that assertion, but in the comment i want to make it clear, mr. speaker, i do not share the majority leader's opinion that the house bill covers all people. as a matter of fact, i think
that's inaccurate, incorrect. disagree on our facts there. our analysis of the bill. what we don't disagree on, however, because the facts are clear, we have a bill that overwhelmingly passed in the senate. if we need comprose, i hope we -- i'm fully prepared to work with the conference as the majority leader is and work with him in a conference to get a bill out of conference. i'm hopeful, mr. leader, that in light of the fact in that house the bill passed 222-205, with 23 republics ving no on that bill. so that we not only have bipartisan opposition, but we have bipartisan support of the senate bill. let me go on to another bill i think is very important because the postal departments facing real stress. somewhat ironic that we are in a congress that has too often
lamented in the senate they could act on things. when they do act in a bipartisan fashion, it seems we can't act. the postal bill has now been passed by a vote of 62 votes in favor. another bipartisan vote of the postal bill. and i'm wondering whether or not the gentleman has any idea whether we might either go to conference or bring a bill out on the house floor that i know has been passed out of committee so that this bill can get to conference in timely fashion so the post office which is facing obviousldefault on some of its obligations would be made whole. i yield to my friend. mr. cantor: i say to the gentleman, the senate postal bill does not have the majority support in the house, and we are continuing to work with chairman issa to ep sure that there isn't an incident of de -- to ensure there isn't an incident of default on the part of the post
office. i think the postal service has indicated there is no risk of that in the short term, and we argoing to continue to address that to ensure that does not happen, all the while trying to address the overall issues as the gentleman knows that the postal serviceas in trying to get its fiscal house in order. i yield back. . mr. hor: lastly, on a note to which we have agreement between the majority and i, which is not always the case as most people know, iran sanctions. both the leader and i, mr. speaker, want to see that bill passed before the august break. and i would inquire of the majority leader his view of the status of that issue at this point in time. mr. cantor: mr. speaker, i would tell the gentleman, i know that our staff have been workinvery diligently on this trying to iron out the differences with the other body and very hopeful
>> the debate on extending the 2001 and to as a pretext cuts. also, discussion of the severe drought problems. morning our speeches, legislative work at 2. live coverage at c-span. >> this weekend on american history tv -- >> we begin to open up the discussion by asking it this way -- what is the nature of the clash between macarthur and truman? is this a clash over policy? is this a problem of personalities? >> truman and macarthur -- johns hopkins professor elliott collins on the relationship that led a president to relieve a general at the height of the korean war. sunday, more from "the contenders," r series of books a key political figures who ran
for president and lost, but changed history. this week, adlai stevenson. his grandfather was vice- president under grover cleveland. his great-grandfather was the first to suggest abraham lincoln as president. "the contenders." american history -- this weekend on c-span 3. >> this weekend on book tv, margaret paris -- parker harris argues that barack obama undermine the civil rights movement that made his election possible. also, edward klein with a critical look at barack obama before and after reaching the white house. then, the former chief economist at the world bank on why growing economic divisions are bad for our democracy in "the price of
inequality." this weekend on c-span 2. >> it is the tradition of common law judges not to reply to criticism. we get clobbered by the press all the time. i cannot tell you how many wonderful letters i have written to "the washington post." just for my own satisfaction -- then i threw them up and -- written up and threw them away. >> you do not send an? >> that is the tradition. you do not respond to criticism. >> antonin scalia reflects on over 25 years on the bench and interpreting legal documents in his latest book, "reading law." sunday o'clock. -- sunday at 8:00. >> jay carney said the president has no plans to push for new gun control legislation, and blamed congress for failing to pass bills such as the assault weapons ban. the president will sign the sequester transparency act,
which requires the white house to say what defense programs to be cut. if congress fails to come up with additional reductions. this is close to one hour. >> it has been so long. after our most recent trip -- i have my water and my espresso. long trip. ok. thank you all for being here. it is wonderful to be back in the white house briefing room. i have a couple of brief announcements that wanted to make, if you'll bear with me first. earlier this morning, john brennan, assistant for homeland security and counter-terrorism, posted an olympic security meeting with the full counter- terrorism enforcement community to prepare for the london 2012
olympic games. following that meeting, mr. brennan provided the president with an update on the olympics as well as the united state government's support to united kingdom prior to and during begins. the president directed that we continue to assure that we are doing everything possible to keep the american people safe and continue close cooperation with our british counterparts. in keeping with the special relationship, the president makes to clear that he has the utmost confidence in our close friends and allies, the united kingdom, as the finalize preparations to host the london olympics. changing the subject, i wanted to note that, as you saw last night, the senate to -- took action to extend the middle- class tax cuts for 140 million middle-class families. the house should follow suit and pass this bill right away. house republicans are now the only people left who are holding hostage the tax cuts for 90% of americans.
the fact is that the capone -- typical middle-class family cannot afford a tax hike at the beginning of next year. it is time for house republicans to drop their demand for another $1 trillion giveaway to the wealthiest americans and give our families and small businesses the security that they need. as the president said last night, we need tax cuts for working americans, not folks who do not need them and were not even asking for them. with that, i take your questions. wait, before i do -- congratulations are in order. i should have said that when i call on you. then. >> thanks. i wanted to get some clarity about gun-control and the president's position since the colorado tragedy -- you have been telling us that the president wants to keep guns out of the hands of the wrong people. under existing laws. last night, he said that there have been actions made but they did not go far enough.
he talked about assault weapons. i want to get rid clear -- does he or does he not think that any new gun legislation is necessary? >> let me back up and say that president obama has called for common-sense measures that protect the second amendment like -- rights of public citizen's and improve public safety by keeping guns out of the answer should not have them under existing laws. thanks to these efforts, background checks conducted on those looking to purchase firearms are now more thorough and complete, with the department of justice able to provide more details on that. i would also say that the president made a broader point last night, which is that tackling the problem of violence is not just about gone loss. in communities across the country, the administration is partnering with local law enforcement and government officials to reduce crime, connect young people with summer jobs so they spend less time on
the streets, and steer children away from a life of gang violence and toward the safety and promise of a classroom. we also must recognize that it is not enough to debate the role of government in reducing violence. it is up to parents, teachers, neighbors, and communities to make a difference in the lives of the aryan people. -- we have to remember that, in the wake of the awful shooting like the one in r.r., colorado -- aurora, colorado -- violence is not a isolated issue. we have to tackle it from a number of directions, which is what the president has been doing. >> speaking to the role of government -- i am still not clear about the answer to my
question. do any existing laws need to be changed? >> we can enhance the enforcement of existing laws by making it more difficult for those who should not have weapons under existing laws, making it more difficult to obtain weapons. that is what the department of justice has been working on. i think that you are aware of the fact that there is a stalemate in congress on a broad range of issues, and this would include this one. the assault weapon ban is an issue that the president has supported the reinstatement of the since its expiration in 2004. given the stalemate in congress, our focus is on steps that we can take to make sure the criminals and others who should not have those guns, to make sure that they cannot obtain the. >> so does he plan to do anything when he talked last night about working with
congress to make another case? >> i am not going to make it scheduling announcements in terms of what the president may or may not say in the future. i consider the point was broader. there is an issue about the stalemate in congress. there are things that we can do, short of legislation and gun laws that can reduce violence in our society. as he mentioned last night in our urban centers. i know that he will continue to press the department of justice to try to enhance the enforcement of existing laws, try to further develop our background check system so that it prevents criminals and those who should not have weapons from getting them under existing law.
he will continue to make sure his administration is partnered with local law enforcement and government officials to try to do the things i talked about at the top that can help reduce violence. >> you focus a lot on background checks. the suspect in aurora passed all of those. could you explain how enhanced background check system would stop them? >> i do not think the president suggested that background checks can stop every crime from occurring in america, even one as heinous as this. i walked into the specifics of what happens because it is obviously an ongoing investigation. but we do need to take a broader look at what we can do to reduce violence in america. it requires a multi-faceted approach, to look at this problem from a variety of angles. that is not just legislative. that is not just about gun laws.
>> is there any official reaction from the white house? >> i was not aware of that -- maybe the state department has a reaction. >> i -- two topics. on syria, you know that this crisis is deepening and ongoing. what is it that the u.s. is doing right now? what can they do besides wait- and-see? >> we are continuing to work with other nations and the friends of syria, as well as other international partners, to provide humanitarian assistance to the syrian people, provide assistance to the opposition as it tries to reform itself -- former itself and unify, non-
legal assistance and administrative assistants, if you will, that the friends of syria is providing as the opposition comes together. it is a point that you made that is worth noting, that there is an ongoing assault happening in syria that demonstrates once again the depravity of president assad and his regime. they are using artillery and aircraft. there were reports of that, as well as helicopters, against a civilian population center. it once again points to the need for international consensus around the idea that syria's feature cannot include president assad because of the actions he has taken against his people. we need to move quickly to look at what syria can and should be in a post-assad world and work
with our partners to create that. his days are surely number. it is clear he is losing control of syria. the momentum continues with the factions erupted government. increasing numbers of formerly pro-regime syrians, ambassadors to foreign countries, high- ranking military personnel, are recognizing that the -- to stand in solidarity with assad is to stand against the syrian people. it is time to focus on what comes next, as i said. >> these are some of the president's strongest words on this issue. does he feel like he has shunned public leadership on the issue of guns? >> the president's feelings about this issue were reflected in what he said.
those comments and remarks echo what the president has said in the past. i think that he does take a broad view about the problem of violence and how we need to address it. he is very mindful of the need, when it comes to legislation, that we ensure that we protect the second amendment rights of law-abiding american citizens. that is important to him. he believes we can take measures to improve public safety by preventing weapons from getting into the hands of those who should not have them under existing law. there are broader aspects to this problem, as i talked about. that is why we need to not look at it through one single prism, but to examine a way that we can help address the problem through existing and local law
enforcement officials or through the education system, the school system, help keep kids off the street and out of gangs, for example. the president noted, and i notice as well -- it is not just a governmental problem. it to something that teachers, parents, neighborhoods, and communities need to talk about and take action to make a difference in the lives of those who might otherwise fallen to violence. >> you used the word "giveaway" yesterday referring to the extension of those lower bush tax cut rates for 2% of the country -- people making more than $250,000 a year. what would you say to a small- business owner who says that that is not a giveaway, that is my money, and i will need some
of that two top pick for health care that i am now mandated to do. it is not giving anything away. >> the question is that a few things. first, this tax cut of the senate has passed and the president supports would go to 97% of small businesses in america. 97%. further, this president has cut the taxes of small businesses in america at 18 times independent of this. his focus on assisting small businesses, which he considers the engine of economic growth and job creation in this country, has been intense and will continue to be. >> i was asking about -- >> your question is about the 3% here. as we know, under the definition of small businesses that republicans used when they are insisting on these tax cuts for millionaires and billionaires
means that -- >> i am talking about people making over $230,000 per year. >> 97% of small-business people under the tax cut will receive this tax code. -- tax-cut. > many of the self-describe small businesses we are talking about -- these are often law firm partners and hedge fund managers. addressing those small businesses following the -- falling in the remaining categories -- this goes out to everybody. this is often misunderstood fact, that given to this tax cut, extending this tax cut to 98% of americans, those who make up to $250,000, means that everyone gets it, even those who make millions, up to the first 250,000 stars. that includes everyone,
including small businesses that file in this manner. secondly, the president believes that small businesses are so important that he has dedicated a lot of energy and focus on providing tax credits and tax cuts to small businesses throughout his three and a half years in office. beyond that, he believes that extending the high-end tax cuts is something we cannot afford. we are talking about $1 trillion over one decade. we have seen what happened when these tax cuts, which you may recall, you and i were covering it, were sold as a payback from the budget surplus achieved under the clinton administration. then, when the economy ran into trouble and the surpluses were beginning to erode, it was sold as an economic stimulus measure.
what we got was middle-class incomes stagnating, the slowest expansion in 50 years, and an economic crisis the likes of which we have not seen in more than 70 years. >> the question is this -- why is it a giveaway? why are you using the term a giveaway. even if he supports the senate democratic bill, it is not technically a giveaway. it is allowing people to keep the tax credits the got in 2001. >> these are tax cuts that we cannot afford, that do not, by the estimates of credible, independent economists, do not measurably help the economy in the way the tax cuts for middle- class americans hope the economy. we have to make choices. it is a tax cut for the wealthiest americans that we simply cannot afford.
those who say that this is terrible for the economy -- remember, you and i covered it. there were proclamations of gloom and doom and stagnation and recession that were promised by republicans when president clinton instituted the tax rates that existed throughout the 1990's. instead of everything republicans predicted, we got the longest economic expansion in our history, 24 million jobs created. plenty of millionaires and billionaires graded as well. it is a matter of choices. that is what the president makes clear. we cannot afford this tax cut for the wealthiest americans. it is a giveaway that we cannot afford. middle-class americans need that tax cut. our economy needs it for 98% of the country. >> when vice president biden
issued a strong statement yesterday about an unattributed quotes from an unnamed romney adviser -- the romney campaign's quote didwas that the not merit a response from the vice-president. did you have a response? >> i will leave campaign questions for the campaign to answer. i find pretty little ironic, given some of the attention paid to quotes from allegedly unnamed obama advisers that have been the focus of attention on the romney campaign. what i can say is this -- the record here is what matters. when this president came into office, our alliances were under strain and were afraid. our standing in the world had been diminished.
in the three and a half years president obama has been in office, he has strengthened alliances around the world, in particular with nato countries and the united kingdom. within, we have a remarkably strong bond and a special relationship that has never been stronger. i will leave the back and forth to the campaign, but let's talk about policy and the facts here. i would note that, in that article in question, as a matter of policy the only difference that i could tell, apart from the phrase that has gotten a lot of attention, the only difference in policy proposal that seemed a parent or that we should move a bus from one room -- a boss from one room to another in the white house. this president has strengthened our alliances and has built up
the american credibility around the globe. he has kept its commitments to iraq,e war in direct -- a ro to take the fight to rockeye, to wind down the war in afghanistan, to rebalance our focus towards asia, which was neglected in the eight prior years, and he is meeting all those commitments. nora -- congratulations. >> thank you very much. on a syria, secretary of state hillary clinton talked about the opposition taking more territory. what is the obama administration weighed in terms of additional support? other conversations about that? >> we are in conversations all
the time about syria, both internally and with our partners and allies around the world. at the night scene -- the united nations, the friends of syria, and elsewhere. our overall policy approach is what it has been. our focus is on continuing to pressure the assad regime, drawn attention to the need for a peaceful transition, the fact that the longer he is in power, even as his grip on power diminishes, the more violent and chaotic the situation and syria becomes. it will continue -- we will continue to provide humanitarian assistance, non-legal assistance for the opposition, consultations with the opposition as reforms itself.
this is all towards the goal of a transition that guarantees fundamental rights and syria of all syrians, including minorities. that is a critical element of any transition. in a situation like this, it is a priority of the united states. >> what is the difference between libya and syria -- libya has at various -- when that becomes clear, the u.s. will become further involved. is that true? >> we have not changed our position in terms of providing .rmeds we are pursuing the policy we have been pursuing, to pressure and isolate the assad regime, to work with partners to continue
to try to build consensus internationally with the effort undertaken at united nations and to support -- point out to russians and others about the need to accept that assad cannot remain in power in syria, and that it is a mistake to provide support to that regime because, in the end, the syrian people will remember whose side each country was on in this brutal conflict. these are the steps that we are taking. i would not read anything beyond that. the fact that the opposition has made gains and that his grip on his country is diminishing -- that is what was noted. >> the national security leaks -- can you say flatly that nobody inside the white house was involved in the national security leaks under investigation? >> this is a matter under
investigation by experienced federal prosecutors. i will not speak specifically about it. i can point you to the statements of the president, statements i have made in the past about this, about the seriousness of this issue. i can make the point that nobody relies on the kind of information that is provided -- classified information provided to help make incredibly typical decisions more than the president of the united states t. he has no tolerance for leaks. that is why he has spoken on this issue like he has. >> one of your past statements on june 11, the cedric was absurd when senator mccain said the white house leaked this information for political gain. david axelrod said nobody was
involved. he was on ms nbc yesterday and said that the president did not leak anything. he followed up by saying that the president did not authorize any leaks. that leaves open the door that there were unauthorized leaks by white house people. have you moved the goal post? >> no. your conflating a lot of things. all the statements are true. i stand by what i said and what mr. axelrod and the president said. there are ongoing investigations, and i would not comment on the specifics. >> can you say that nobody in the white house was involved? >> involved in which particular case? the president takes this very seriously. it is an insult and preposterous to suggest that this white house would leaked classified information for political gain. that did not happen and would not happen under this president.
a lot of this began as a focus on the operation that successfully removed osama bin laden from the battlefield. the fact of the matter is that the president spoke to 100 million people about that operation. its existence is well-known. this president has had -- this president finds the use of the kind of information that is protected in our national security environment highly important. he has to make life-and-death decisions based on that information all the time. he thinks that it is extremely important that that information be state -- safeguard. >> richard williams flat out accused tom donnell and of leaking information. >> he made that accusation based
on rumors he had heard in the journalistic community. that same person called russia "the soviet union" multiple times. he called governor romney governor reagan multiple times. he could not, as i could tell, accurately ocheor coherently ste a foreign policy difference between this president and the governor. i would that the investigations take place. >> veterans affairs -- the president said to the vfw that veterans will not be affected by the sequester. general shinseki, who is meeting with the president today, testified yesterday on capitol hill and said that administrative costs would be effected by the sequester -- not veterans' benefits. the question is, when you have the veterans secretary saying that there will be some cuts to veterans affairs because of the sequester, the president is
saying your pet -- benefits will not be effected. how do know that is sure when the budget will take a hit? >> i would refer you to the secretary's comments. if the sequester were to come about and will take effect, and i am deciding what secretary shinseki said -- the impact would be on the administrative costs of his agency. --'s back up and be clear the whole point of the sequester was to create a forcing mechanism to get congress to act. the costs -- the sequestered itself was filled with cuts to defense and non-defense spending that were so onerous that nobody would support them. the president does not support them. republicans and democrats in congress do not support them. bipartisan majorities of both republicans and democrats voted for this measure because they thought it was necessary to hold themselves accountable to do the
right thing, which was to pass a balanced deficit reduction plan. as you know, it is -- the only opposition to be balanced plan has come from republicans who refuse to accept the very mainstream principle that we should not ask only the middle- class and seniors to bear the burden of getting our fiscal house in order. we have a situation where defense cuts that the president leaves are much too deep, that republicans and democrats believe are much too deep, as well as non-defense cuts -- republicans would allow us to go into place rather than ask millionaires and billionaires to pay little bit more. that is unacceptable as far as this president is concerned. every bipartisan commission that has looked at this issue has said that we need to take a balanced approach that includes spending cuts, the entitlement reforms, and revenues.
some gatherings of centers, the gang of six and others, have adopted the principle. that is the principle that undermines the president's budget proposals. this is the principle -- that underlines the president's budget proposal. that is the proposal we have to take. it is supported by the american people. unfortunately, there is an obstacle in congress that has prevented us from moving thus far. hopefully that will not be the case as the year moves on. >> you are talking about the security briefings about the olympics. does the united states have a role in the olympics security? >> we have a very close relationship with the british, obviously, on security issues. it is an international event
where many americans will present, as well as people around the world. we assist our allies with security operations all the time. in that sense, this is obviously a british event hosted in london. the british are running this security operation, but we are absolutely providing assistance. >> when you say we are providing assistance, what does that mean? is intelligence, actual boots on the ground? >> we are providing advice, consultation, cooperation. i do not have specifics beyond that. >> does this have anything to do -- to do with what mitt romney said about security? >> the president had his briefing today, so the answer is no. >> the decision to read it out publicly? >> no. >> just asking.
>> you may claim that the president had a record on gun control. what is that? the answer to ben's question about things he has done during the administration on the issue of gun control -- what has he done? beyond expanding gun rights to national parks -- national parks so people can carry concealed guns. >> one measure taken at his direction by the department of justice to enhance the quality of a background checks system that reduces the likelihood that weapons fall into the hands of criminals and others who should not have them under existing law. those are actions that the department of justice has -- >> [inaudible] >> when this came up earlier, we had some of this.
the department of justice has it. we have taken a number of measures to increase the quality -- quantity of the intermission and depth of intermission that is -- that goes into the background check system. that is progress. that has a positive impact on the goal of preventing weapons that should not get into the hands of criminals under existing laws from getting into them. >> what about the assault weapons ban? >> he supports it. he has from the beginning. i think that you know very well that there is a stalemate in congress on that issue, as there is on so many issues. >> you guys put your shoulder in on that and said that we demand a vote. not the same level of concern --
>> i would say that the president supports it. he recognizes that there is a stalemate in congress. he believes that anything congress were to do must cross the threshold of protecting the second amendment rights of american citizens, law-abiding citizens. while there is that stalemate in congress, there are other things we can and should do. action that we do not often talk about here, but those to cover federal law enforcement as well as education know about programs in place to help local officials deal with violence in their communities to help connect teenagers with summer jobs and help keep teenagers off the streets and out of gangs. that is all of -- part of a broader effort to reduce violence.
>> you have said -- thank you very much. [laughter] the president and you have said that the wealthy do not need a tax cut right now. then why do you still allow them to have a tax cut on the first $250,000 of their income? >> the principle is that we should reduce taxes -- extend the tax cuts for everybody earning under $250,000 or less. you know how our tax code is written. that means that everybody making up to that point in joys that tax cut. what the president does not believe is that we can afford extending the bush high-income tax cuts. they are too expensive, are not helpful to the economy, and what we know from past experience is
that the upper marginal rates in place under the administration -- the clinton administration did not in any way impede economic growth. in fact, the tax rates of the 1990's were -- that were decried by republicans were in place and were a lot when we had the longest peacetime economic expansion in our history and when the economy created 24 million jobs. that is fine. >> you have said many times are ruinous the bush tax cuts were. why still extend them? >> we believe that the marrow class needs and deserves -- middle-class needs and deserves the assistance that this would provide. we cannot raise taxes on a class by an average of $2,200 next year.
that as good as -- for individual families. as an economist, because of the nature you know that independent economists broadly agree that the economic benefit of tax cuts is disproportionately felt when those tax cuts are given to lower and middle-income americans, that higher-income americans are much less likely to inject the money directly into the economy. therefore, the economic benefit, setting aside the fairness argument, the economic benefit is minimal. it is outweighed by the cost. we're talking about $1 trillion over 10 years. you mentioned the ruinous effects of the bush tax cuts -- those high-and tax cuts contributed mightily to the record deficit that president obama inherited when he came into office.
>> olympic security -- was there a new or more recent request from the british government for assistance? >> not that i am aware of. this is the kind of partnership that we have. we have a longstanding close cooperation relationship with u.k. officials on security and intelligence matters. u.s. personnel in london for the games were building on a well- established law enforcement and intelligence sharing relationship that exists between our two countries treat the bureau of diplomatic security has led for olympic gains in countries. >> one more -- on the tax cut, does it not take two to have a stalemate? president obama -- his position is he not as firm as republicans? >> i'm glad you asked that
question, because no. no. everyone in washington, alike,can and democrati on capitol hill and congress, it support extension of the middle- class tax cuts. let's do it. let's pass that into law and give that security to 90% of taxpaying americans. let's give that help to the economy that that certainty will create. then we can debate the merits of tax cuts for the top 2%. that is where the disagreement is. everybody agrees on tax cuts for 98%. why can we not get that done? tax cuts for the 2% weekend debate and have a healthy debate. there are strong feelings on both sides, but we all agree that americans earning up to $250,000, 90% of us, should get that tax cut extended period --
98% of us, should get that tax cut extended. they could pass that unanimously. >> is a stalemate? >> in this case, yes. there are real differences between the parties, obviously, and the two contenders for the presidency. as the president has made clear, here is an area where there is broad agreement. we will continue to debate whether or not we should take a balanced approach to our fiscal challenges. we will continue to debate whether we need to give tax cuts to the top 2% of income earners in america. we will debate a number of other issues -- the merits of extending health care reform and wall street reform, for example. here is something that we all agree on. if we all agree on it, let's
pastorate. the president will sign it and then we can debate the issues that continue to divide us. >> we now know that governor mitt romney is attending the olympics in london. the question is, you also know that michelle obama is leading the presidential delegation. is there a temporary bipartisan troop -- chris? >> every american supports our athletes, whether they are republican, democratic, independent, or otherwise. >> has the president sent a special message along with the first lady? >> there is a message that the president and first lady delivered to -- will deliver from the president -- i do not have any details on that, but yes.
we will all be watching. very excited. >> the house and senate passed a bill to require the white house to reveal the details of sequester cuts. will the president signed that bill, and do you have that information? >> the president will sign the bill. up to this point, the staff have been conducting the analysis needed to move. should it get to the point that it seems that congress will not do its job and the sequester will take effect, the entire administration will be prepared. but let me be clear -- there is no amount of planning for reporting that will turn the sequestered into anything other than the devastating cuts in defense and domestic investment the drug was meant to be. the sequester was passed by republicans and democrats not as a policy that we want to see enacted, but as if for some mechanism to get congress to act in a serious and balanced way on deficit-reduction. the president has said that
there is no reason why these cuts should happen and congress wants to be able to come together and agree on a balanced approach that keeps our military strong. right now, as i noted earlier, congressional republicans are trying to get that -- get out of what they agree to because they would rather defend tax cuts for the wealthiest americans and make tough choices needed to reduce the deficit. even if it risks big cuts in our military. the president of degrees and will continue to urge congress to act to avoid these devastating cuts. he will sign the bill. >> two questions. on the initiative for education, what is the budget for that? arne duncan is holding the purse strings. i ask that because there is such inequity in educational excellence between black and mainstream students. to bridge that gap, it will take
a lot of money. how much money is this white house putting out for that? >> again, this is something that will be overseen by the department of education. in terms of how it is funded i would refer you to them. the executive order reflecting that the president has made providing a competitive legislation for all americans is a top party. the initiatives for african- americans will work across federal agencies with partners nationwide to produce a more effective continue of education programs for african-american students. the initiative aims for all african-american students to prepare them for high school graduation, college completion, and productive careers. this is obviously a part of a broader effort that this
president and his administration have embarked upon to improve education in america. when it comes to teachers in the classroom, this is an issue that the president cares very deeply about. that is why in the american job that he called on congress to provide funding to put teachers back in the classroom to prevent their layoffs around the country that have occurred at state and local government levels and have affected teachers and policemen and firefighters disproportionately. the specially in the education field -- republicans in congress have refused to pass that. if congress would act on that, on those elements of the american jobs that they have yet to pass, not only would we benefit from what economists would say would be another 1 million jobs for our economy, but every child in america who is in a public school could potentially benefit from having
those teachers go back to work. we call on congress to act on that immediately. >> on gun control, what does this administration and democrats like congressman ed towns of new york -- he says there needs to be serious discussion on issues of gun control. he says that we have seen presidents killed by guns. we have seen in urban areas -- people killed by guns. civil-rights leaders killed by guns. devereaux giffords -- gabrielle deferreds shot. columbine, virginia tech band -- and the latest massacres. talking about -- are we tolerating violence? what do you say about that? >> i would say what i have been
saying earlier in this briefing, which is that the president is focused on steps that we can take to keep guns out of the hands of people who should not have them under existing law. because of those efforts, background checks are noun and -- more thorough and complete. there is a broader issue that your question raises about the violence in the country in different areas of the country that needs to be addressed, not just through legislation and not just through laws affecting guns, but has to do with education and economic opportunity. it has to do with assistance to local law enforcement and government officials in their efforts in their communities. it has to do with teachers and their parents and their neighborhoods, coming together to address this problem. it is not, as the president said -- we have shocking events like
the one that occurred in aurora or virginia tech bank. -- virginia tech. there are too-high levels of violence occurring every day in the united states. we need to take a comprehensive approach. in terms of legislation, there are obstacles in congress. the president believes that we need to take measures to protect american second amendment rights were up insuring that those who should not have weapons do not get them. >> about violence -- we see the proliferation of violence. if reelected, what will this president -- will this president actively pushed for the reinstatement of the assault weapons ban? >> i have stated the president's position on that. it has not changed. the president will continue to push for common-sense measures
that make it harder for those who should not have guns under existing law from getting them while protecting the second amendment rights of american citizens. >> the decision of romney to attend this fund-raiser in london attended by members about -- there will be a presence from barclays. >> that is a question that i would refer to the campaign. >> the amounts of money that is being spent abroad -- the president has raised over $600,000 in other countries. to most americans -- a ban would be surprised to hear that. >> that is money being raised by -- i would refer you to both
campaigns. in terms of that. i know that we follow the rules in terms of fund-raising. on the other issue, i would refer you to the reelection campaign. >> what city does this administration consider to be the capital of israel? jerusalem or tel aviv? >> i have not had that question in a while. our position has not changed. what is the capital? >> you no opposition -- that is our position. >> she does not know -- that is why she asked. she does not know. i do not know. >> why does the president wait? what is the reason for the venue of his remarks? >> the urban league conference
is an appropriate venue. he talked about a number of issues, including the economy. also the problem of violence in urban communities. >> i wondered if he was planning to do that at a more noticeable time. >> you mean a speech in front of a vast audience with television cameras was not more noticeable? we did not organize the conference. it was a very appropriate place to add -- have that conversation. >> tel aviv or jerusalem? >> you know the answer. >> you do not know the answer. what do you recognize? >> our position has not changed lester.
>> india now has a new president -- >> i do not have any readout. >> the prime minister of india has said that there is a shadow prime minister -- what does he think about the existence of him? >> i have not had that conversation. we have a very important relationship with india. we will let you know. but i have not had that conversation. >> the international aids conference in washington -- thousands of people around the globe are here. what message is had -- aids has come down in this country but around the world -- >> the commitment to fighting aids globally and in this country has been demonstrated. we give up a lot of information in advance